Cruachan Dam, Scotland, where Drax has a 440MW pumped hydro energy storage (PHES) facility. Image: Drax.
A cap and floor regime would be the most beneficial solution for supporting long-duration energy storage in the UK, a report from KPMG has found.
The professional services firm was commissioned to write the report by power generation group Drax. It detailed how there is currently no appropriate investment mechanism for long-duration storage.
Examining four investment mechanisms – the Contracts for Difference (CfD) scheme, Regulated Asset Value (RAV) model, cap and floor regime and a reformed Capacity Market – it identified cap and floor as the best solution.
Currently, challenges facing long-duration storage projects include revenue and cost uncertainty, long lead times for project development and high upfront capital expenditure requirements.
Last…